Honda puts off building motorcycle plant in India

Honda Motor Co. has suspended building a motorcycle factory in India, the world’s second largest two-wheel market, because of excess capacity, according to an article on Livemint.com.

Honda could raise the capacity in its existing facility if need be, says Shinji Aoyama, president and CEO of Honda Motorcycles and Scooters India.

“There is still enough capacity (in the existing facility), and it may reach 1.3-1.4 million units,” he noted.

The sales of two-wheelers, the entry level for motor transport in India and the main mode of commuting, fell nearly 8 percent in last fiscal year to 7.25 million units.

“Total capacity far exceeds demand,” Aoyama said. “One must be careful about expansion. These (last) five-six years the industry has grown at (double) digits (growth rate. We should expect some single-digit growth now.”